Information For Pensioners

The introduction of Pension Credit represents another major step forward in the Government’s welfare reform programme.

Pension credits are designed to:

• combat poverty amongst pensioners
• reward those who have modest savings on retirement
• ensure people aged 60+ take up their entitlement to financial help
• modernise the pension service, removing stigma and reducing complexity

What is pension credit?

Pension Credit is a new entitlement that was introduced on 6 October 2003. It is run by the Pension Service, but it has had a significant effect on Housing and Council Tax Benefits, which are run by the Council.

The Pension Credit is made up of two key components:

• Guarantee Credit which replaces Minimum Income Guarantee, ensuring a minimum level of income for those aged 60+
• Savings Credit which will provide additional income for pensioners over 65 who have made provision for their retirement by having savings/and or a small private pension.

You can be entitled to either credit or both depending on your circumstances.

Capital

There is no limit to the amount of money you can have when you claim Pension Credits, but it may affect the amount of credit you are entitled to.

Under Pension Credit rules it will be assumed that every £500 savings you have over £6,000 (£10,000 if you are in a care home) creates £1 weekly income.

Guarantee Credit

Entitlement to the guarantee credit, with or without the savings credit, will give you full housing/council tax benefit, even if you have over £16,000 in capital.

If your guarantee credit amount is less than 10p you will not actually receive it from the Pension Service, but you will still be entitled to full housing/council tax benefit.

Award of Savings Credit only

If you are entitled only to savings credit, you will only be able to claim normal, means tested housing/council tax benefit. Your savings credit will then be taken into account when calculating your housing/council tax benefit.

If you are in receipt of savings credit, we have to use the information on your income and circumstances that the Pension Service provides us with. They will give us the details of your income and savings, which is known as the Assessed Income Figure, which will include details of what they have taken into account and what has been disregarded.

If you are entitled to savings credit without guarantee credit but have capital in excess of £16,000, there will be no entitlement to housing/council tax benefit.

Changes you should report directly to the Council

If any of your details listed below change you need to tell us by contacting the Benefits team.

If you receive Guarantee Credit or Guarantee Credit and Savings Credit

• changes to the tenancy
• changes to non-dependants
• absence from home if absence likely to last longer than 13 weeks

If you receive Savings Credit only

• changes to the tenancy
• changes to dependent children
• changes to the household composition and non-dependants
• changes to Child Tax Credit
• changes to Child Benefit
• capital exceeding £16000
• changes to the income and capital of partners not included in the Pension Credit claim

Further Information

The Department of Work and Pensions (DWP) website has much more information on Pension Credits including a calculator that will give you an estimate of what you are entitled to. The DWP website also has an application form to download and details of how to apply.

You can use the Benefits Calculator on this website to see an estimate of housing/council tax benefit entitlement.